Achillion Pharmaceuticals (ACHN) Gets Wiped Out After FDA Maintains Hold On Its Lead Drug
Shares of Achillion Pharmaceuticals (ACHN) crashed 60% last week, after the company stated that the FDA maintained its clinical hold on its leading hepatitis C (HCV) drug, sovaprevir, which has been on hold for more than three months due to fears that it could cause liver damage. That news devastated shareholders, who had hoped that sovaprevir would compete with upcoming HCV treatments from Gilead Sciences (GILD) and AbbVie (ABBV), which analysts believe could both hit the market by next year.
All three treatments are orally administered, next-generation HCV treatments with a milder side effect profile than many existing treatments, with are injected and rely on interferon. Interferon occasionally causes flu-like symptoms. Daily Chart
In addition to sovaprevir, Achillion has three other HCV treatments - ACH-2684, ACH-2928, and ACH-3102 - but they are still all in phase 1 and 2 trials. Sovaprevir was the farthest along in development, reaching phase 2a, but now it appears that the company will have to fall back on its other treatments. Sovaprevir was put on a clinical hold in June, after the FDA noted elevations in liver enzymes, an indicator of liver damage, during its phase 1 study. If Achillion can ever get the FDA to allow sovaprevir to resume, it will arrive much later than the the treatments from Gilead and AbbVie. Not only is that window of opportunity closing, but the companyâ s losses are piling on without any kind of revenue coming in. During the second quarter, it reported a net loss of $0.21 per share, down from a loss of $0.16 per share in the prior year quarter. This was primarily caused by higher expenses. General and administrative expenses climbed 37.4% year-over-year to $3.5 million, due to non-cash stock based compensation. Research and development expenses also soared 84.5% to $16.6 million. In other words, the company spent a lot, made nothing, and now its lead drug is dead in the water. On the bright side, it still has three other drugs to try out, although there is definitely no immediate upside left for the stock now. Other News About ACHN Achillion Falls on FDA Hold on Hepatitis C Medicine
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Published on Oct 15, 2013
By Leo Sun